HHI seeks control of Hyundai Corp

Mike Grinter, Hong Kong - Tuesday 31 March 2009

HYUNDAI Heavy Industries, the world’s largest shipbuilder, was said to be leading bids for group company, Hyundai Corp, according to sources. Compatriot companies BNG Steel Co and Q Capital Partners have also entered bids for a controlling stake in the trading company which is thought to be worth around $150m. Korea Development Bank, the state-run financial institution behind the failed bidding process for the country’s third largest shipbuilder Daewoo Shipbuilding and Marine Engineering in December 2008, is leading creditor of Hyundai Corp with a 22.5% stake.

Woori Bank holds 22.48% in Hyundai and the Korea Exchange Bank controls 14.4% of the company. The trio of creditors has been trying to sell the company since last year. Hyundai was bailed out by the creditors in 2004 through a debt-for-equity swap. The creditors have extended the workout debt programme for Hyundai for one year, although it is understood that the company has been operating on a firmer financial basis. Hyundai Corp’s shipbuilding arm in China Qingdao Hyundai is one of the very few yards globally to have won newbuilding orders this year when it signed a $120m order for ten bulk carriers from the Volga Baltic Co of Russia.

A Seoul-based analyst said: “We don’t think this is an important deal, Hyundai Corp is capitalised at about $300m. The company seems to add very little value to HHI’s overall portfolio.”